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City Council Resolution 2007-29CITY OF MONTICELLO WRIGHT COLNTY STATE OF MINNESOTA Council member Tom Perrault introduced the following resolution and moved its adoption: RESOLUTION No. 2007 -29 RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1; AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 1-33 THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. BE TT RESOLVED by the City Council (the "Council') of the City of Monticello, Minnesota (the "City"), as follows: Section L Recital s. 1.01. The Board of Commissioners (the "Board ") of the Monticello Housing and Redevelopment Authority (the "HRA ") has heretofore established Central Monticello Redevelopment Project No. 1 and adopted the Redevelopment Plan therefor. It has been proposed by the HRA and the City that the City adopt a Modification to the Redevelopment Plan for Central Monticello Redevelopment Project No. 1 (the "Redevelopment Plan Modification ") and establish Tax Increment Financing District No. 1 -38 (the "District ") therein and adopt a Tax Increment Financing Plan (the "TIF Plan ") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans "); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.1799, all inclusive, as amended (the "Act "), all as reflected in the Plans, and presented for the Council's consideration. 1.02. The HRA and City have investigated the facts relating to the Plans and have caused the Plans to be prepared. 1.03. The HRA and City have performed all actions required by law to be performed prior to the establishment of the District and the adoption and approval of the proposed Plans, including, but not limited to, notification of Wright County and Independent School District No. 882 having taking jurisdiction over the property to be included in the District, a review of and written comment on the Plans by the City Planning Commission, approval of the Plans by the HRA on April 11, 2007, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports ") relating to the Plans and to the activities contemplated therein have heretofore been prepared by staff and consultants and submitted to the Council and/or made a part of the City files and proceedings on the Plans. The Reports include data, information and/or substantiation constituting or relating to the basis for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. 1.06. The City is not modifying the boundaries of Central Monticello Redevelopment Project No. 1, but is, however, modifying the Redevelopment Plan therefor. Section 2. Findings for the Adoption and Annroval of the Plans. 2.01. The Council hereby finds that the Plans are intended and, in the judgment ofthis Council, the effect of such actions will be, to provide an impetus for development in the public interest and accomplish certain objectives as specified in the Plans, which are hereby incorporated herein. Section 3. Findings for the Establishment of Tax Increment Financing District No. 1 -38. 3.01. The Council hereby finds that the District is in the public interest and meets the requirements for an "economic development district' under Minnesota Statutes, Section 469.174, Subd. 12. . 3.02. The Council further finds that the proposed development would not occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the praj ected tax increments for the maximum duration of the District permitted by the Tax Increment Financing Plan; that the Plans conform to the general plan for the development or redevelopment of the City as a whole; and that the Plans will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the redevelopment or development of the District by private enterprise. 3.03. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. Section 4. Public Purpose 4.01. The adoption of the ]Pians conforms in all respects to the requirements or trie Act and will result in increased employment in the state and in the preservation and enhancement ofthe tax base of the State because it will facilitate the development of a warehouse and distribution facility on underutilized laud and will create new employment opportunities. The Council expressly fords that any private benefit to be received by developers is incidental, as the assistance is provided only to write -down the high industrial park development costs incurred by the HRA and only in the amount necessary to carry out that purpose. That is, the tax increment assistance is necessaryto provide the public benefits described above. Therefore, the Council finds that the public benefits of the Plans exceed any private benefits. Section 5. AR=val and Adoption of the Plans. 5.01. The Plans, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the City Administrator. 5.02. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and to negotiate, draft, prepare and present to this Council for its consideration all fuuther plans, resolutions, documents and contracts necessary for this purpose. 5.03 The Auditor of Wright County is requested to certify the original net tax capacity of the District, as described is the Plans, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the Monticello Housing and Redevelopment Authority is authorized and directed to forthwith transmit this request to the County Auditor in such foam and content as the Auditor may specify, together with a list of all properties within the District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 5.04. The City Administrator is further authorized and directed to file a copy of the Plans with the Commissioner of Revenue and the Office of the State. Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. The motion for the adoption of the foregoing resolution was duly seconded by Council member Wayne Mayer , and upon a vote being taken thereon, the following voted in favor thereof Clint Herbst, Wayne Mayer, Tom.Perrault, Brian Stumpf and Susie Wojchouski and the following voted against the same: None Dated: April 23, 2007 ATTEST: 64f Clint Herbst, Mayor (Seal) Jeff ONeill, City Administrator lEX1BIT A RESOLUTION NO. 2007 -29 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Tax Increment Financing District No. 1-38 as required pursuant to M.S., Section 469.175, Subd. 3 are as follows: 1. Finding that Tax Increment Financing District No. 1-38 is an economic development district as defined in M.S., Section 469.174, Subd. 12. Tax Increment Financing District No. 1 -38 is a contiguous geographic area within the City's Central Monticello Redevelopment Project No. 1, delineated in the TIF Plan, for the purpose of Financing economic development in the City through the use of tax increment. The District is in the public interest because it will increase employment in the state, and preserve and enhance the tax base of the state. 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonablyforeseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtra cling the present value of th e projected tax in crevi en tsfor the maximurra duration of Tax Increment Financing District No. 1 -38 permitted by the TIF Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonablyforeseeablefuture: The development proposed in the TIF Plan is a production/warehouse facility that meets the City's objectives for economic development. Poor soil conditions in the location have required extraordinary site improvement and utility costs resulting in high land acquisition costs for potential developers. These high costs make development of the facility in this location infeasible without City assistance. The HRA is the land developer and is charging only enough to cover its costs plus interest to build the infrastructure to support this development. The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to resultfrom the proposed development after subtracting the present value of theprojected tax incrementsfor the maximum duration of the TIFDi strict permitted by the TIFPlan: This site is part of a new industrial park, with high start-up costs incurred by the HRA to acquire and grade land and install infrastructure. If the HRA sold the land at its true value, it would be unlikely to find willing buyers. All parcels previously sold in this industrial park also required tax increment assistance, and the City expects that future sales will require similar incentives. Therefore, the City reasonably determines that no other development of similar scope is anticipated on this site without substantially similar assistance being provided for development. Therefore, the Council concludes as follows: a. The City's estimate of the amount by which the market value of the entire District will increase without the use of tax increment financing is $0, other than minimal appreciation. b. if all development which is proposed to be assisted with tax increment were to occur in the District, the total increase in market value would be up to $658,742. C. The present value of tax increments from the District is estimated to be $78,643. d. If the City and HRA did not assume the role of land developer, the property would not develop in the near term. Even if some development other than the proposed development were to occur, the Council finds that no development with a market value of greater than $580,099 (the amount in clause b less the amount in clause c) would occur without tax increment assistance in this district within 9 years. 3. Finding that the TIFPlan for Tax Increment Financing District No. 1 -38 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the TIF Plan and found that the TiF Plan conforms to the general development plan of the City. 4. Finding that the Tax Increment Financing Plan for Tax Increment FinancingDistrictNo. 1 -38 will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development of Central Monticello Redevelopment Project No. I byprivate enterprise. The project to be assisted by the District will result in increased employment in the City and the State of Minnesota, increased tax base of the State, and add high - quality development to the City.